US conglomerate Berkshire Hathaway engages in both primary insurance and reinsurance of property/casualty, life and health risks through its units GEICO, General Re, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group.

The insurance businesses generated an underwriting loss of $267 million in the first quarter of 2017 compared to a profit of $213 million in the same period a year ago.

Losses were driven by increased loss estimates for prior years’ loss events, higher losses from current year catastrophe events and increased deferred charge amortization related to the property and casualty reinsurance businesses, Berkshire said in its results statement.

Berkshire Hathaway Reinsurance Group (BHRG) made an underwriting loss of $600 million in the first quarter of 2017 compared to a negative $79 million in the same period a year ago.

BHRG underwrites excess-of-loss reinsurance and quota-share coverages on property/casualty risks for insurers and reinsurers worldwide, including property catastrophe insurance and reinsurance. The firm also writes retroactive reinsurance on property/casualty exposures as well as life reinsurance and periodic payment annuity business.

The BHRG property/casualty business generated pre-tax underwriting losses of $269 million in the first quarter of 2017 compared to pre-tax gains of $126 million in 2016. The decline in first quarter underwriting results was primarily due to increases in estimated ultimate liabilities for prior years’ loss events and an increase in current year catastrophe losses, the company said.

In 2017, the unit incurred losses of approximately $270 million related to prior years’ loss events and estimated losses of $52 million from a cyclone in Australia in March. The losses for prior years’ loss events primarily related to unanticipated reported claims from hurricane and earthquake events in 2016 and from increases in estimated incurred-but-not reported losses.

The retroactive reinsurance business was impacted by the AIG deal. In January 2017, Berkshire entered into an aggregate excess-of-loss retroactive reinsurance agreement with AIG via its unit NICO that became effective on February 2, 2017.

The increase in pre-tax underwriting losses from retroactive reinsurance contracts to $170 million in the first quarter of 2017 from $110 million in 2016 was primarily due to deferred charge amortization related to the AIG contract and another retroactive reinsurance contract written in December 2016, the company said.

The General Re property/casualty operations made a pre-tax underwriting loss of $143 million in the first quarter of 2017 compared to a pre-tax underwriting gain of $30 million in 2016. General Re increased its estimates for unpaid losses by $142 million with respect to United Kingdom liability business written in prior years. The increase was the result of the UK Ministry of Justice’s decision to reduce the fixed discount rate required in lump sum settlement calculations of U.K. personal injury claims, referred to as the Ogden rate, from 2.5 percent to negative 0.75 percent.

“We expect the Ogden rate decrease will significantly increase claim costs associated with currently unsettled cases, as well as for future cases,” the company noted. General Re underwriting results for the first quarter of 2017 also included $50 million of estimated losses from a cyclone in Australia in March 2017.

Overall, Berkshire Hathaway reported net earnings attributable to Berkshire Hathaway shareholders of $4.06 billion in the first quarter of 2017 compared to $5.59 billion in the same period a year ago.